Friday, June 26, 2009

On Fox and Friends Friday morning, Steny Hoyer, Democrat majority leader of the US House of Representatives, claimed the real cost of the 1200 page monstrosity known as H.R. 2454, the Waxman-Markey "The American Clean Energy and Security Act," (commonly known as Cap and Trade) would cost each American household $175 and would create American jobs.

Do not believe this assertion.

Numbers are the ultimate refuge of scoundrels, especially politicians. This $175 per household cost was generated by the non-partisan Congressional Budget Office (CBO), sure enough. But you need to dig through the dry, dense prose of CBO report to understand exactly what the number means.

Undoubtedly, you will hear Democrats trumpeting this number all day, damped only by the news of Michael Jackson's death. The CBO number represents only the day to day operating costs of the program. The CBO number is only a snapshot in time, with the snapshot taking place in 2020, before the full impact of the Cap and Trade program hits America. The full impact of the Cap and Trade carbon restrictions take place AFTER 2020.

Worse yet, the CBO analysis does not include the effects of increased prices of fossil fuels. You know those increased fuel costs that energy utilities, oil companies and any manufacturer using energy or plastic in their products, will be passed directly to YOU, the consumer. From the CBO report:

"The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap."

So when the Democrats crow about the low cost of instituting Cap and Trade, they are not including the actual energy costs that you will pay as a result of this outlandish scheme to collectivize yet another part of the American economy, they are only telling you how much it will cost to administer and run that program.

One of the most broad economic analyses of Cap and Trade was performed by the Heritage Foundation. This conservative think tank analyzed the economy with and without the carbon tax being imposed by Cap and Trade. Heritage found that in the year 2020, where the CBO analysis shows $175 per household costs to only operate the program, the total economy would be depressed by something in the order of $161 billion, or roughly $1870 per household of four. This is the estimated increased cost of the energy you will be forced to pay. When all of the restrictions imposed by the Cap and Trade bill are fully enforced in 2035, Heritage estimates the household costs to be in excess of $6800 per year.

But there's more. Some areas of the US rely more heavily on fossil fuels to generate power, and those wide open spaces of the midwest and west mean that people and goods must travel large distances in cars and trucks. CBO estimates have been averaged over the entire nation, as is the Heritage number cited above. However while performing its analysis, Heritage was prescient enough to consider the geographical effects. Those areas more reliant on fossil fuels will have higher costs, while those areas serviced by wind, solar and nuclear power (currently a very small percentage of consumers because of the onerous environmental regulations surrounding these alternate technologies) will pay less. So if you live in areas with coal fired electrical plants, or areas where you need to drive a long distance to get to work or transport goods, expect to pay more.

If you don't believe the Heritage analysis, let's look overseas. Britain has had these types of taxes for a few years. The Taxpayers Alliance, a British think tank, estimates the current cost to British consumers is an additional $1300 per year. And in Spain, where government instituted regulations forced non-market driven green technologies into the country's economy, two "regular" jobs have been lost for each "green" job created, and those "green" jobs cost the Spanish taxpayer $1 million per job.

The Republicans have offered an alternative to the Democrat Cap and Trade proposal with little or no real costs, but there has been paltry little coverage in the MSM.

So today, you are going to hear a few things from Democrats. One is that Cap and Trade is relatively cheap. Another is that Cap and Trade is a job creating bill. Here are the numbers, you decide.

Monday, June 15, 2009

One may wonder exactly who are the "uninsured." The uninsured can be broken up into three major categories, those who are currently eligible for some government program for which they have not signed up (e.g. Medicaid), those people who have family incomes of over $75,000 who could afford a good healthcare policy if they so wished, and people who have entered and continue to live in this country illegally.

Let's look at the numbers:

U. S Population:307 million

Total Uninsured: 47 million

Not enrolled: 14 million

Earning over $75k: 10 million

Illegal Immigrants: 9.4 million

Using these numbers, one sees that there are 13.6 million people who are currently uninsured, or 4.4% of the citizens of the US. It is up to you to decide if the $1.4 trillion estimated to be required for an overhaul of the healthcare system is cost effective.

If you are "The One," when you say something, it must be so. President Barack Obama has touted the Waxman-Markey Cap and Trade legislation to be the centerpiece of his energy and environmental policy. Democrats claim Waxman-Markey provides a market based solution to the perceived problems in energy and the environment. Nothing could be further from the truth. This scheme, cooked up by Obama and the Democrats in Congress, will do little more than drain the American economy and have a negligible effect on the environment.

Rasmussen reports that only 24% of Americans have even a remote idea that Cap and Trade refers to energy and environmental legislation. Fewer still understand the ramifications such legislation would have on the American economy while having little impact on global warming. Painting with a broad brush, Cap and Trade involves the Federal government establishing limits on an emitted substance (the Cap) which then issues allowances that various entities pay to obtain. Those entities can then use the allowance to "pay" for the right to emit the substance, or they can exchange the allowance with others (the Trade). (More information here) Since we are all too aware that all additional costs associated with any product or service are passed along to the consumer, Cap and Trade is nothing more than an elaborately hidden price increase, or tax, on all those who light their homes, drive to work, or use any plastic product.

Waxman-Markey will set off a trade war. It has been called by George Will the new "... Smoot-Hawley tariff of 1930" which "ignited reciprocal protectionism that suffocated global trade and deepened the Depression." Will calls, "The cap-and-trade legislation passed recently by a House committee is Smoot-Hawley in drag: It contains provisions for tariffs on imports designated "carbon-intensive" -- goods manufactured under less carbon-restrictive rules than those of the proposed U.S. cap-and-trade regime. Eco-protectionism is a recipe for reciprocity." Goodbye American jobs.

Ultimately, the pressure of the caps are intended by their proponents to drive companies and individuals toward alternate energy sources. Nice try. There are very few sources of energy that can come close to meeting our existing and future needs for energy. Only fossil fuels (oil and natural gas) and nuclear power are currently technologically feasible to meet the demands of a modern economy. Fossil and nuclear fuels supply the U.S, with over 91% (70.4% and 20.7% respectively) of its electricity needs, with hydroelectric power coming in a distant third with 5.6%. The technologies involved to make a serious change in current power distribution (wind, solar, alternate fuels) are tens-of-years away from being able to make a significant dent in these percentages. Let's not even talk about transportation which is almost entirely dependent on oil.

Because of special interests, a regulatory labyrinth exists at all level of government that have prohibited for decades the construction of new refineries or nuclear powerplants. Those same special interests prohibit expansion of proven U.S. fossil fuel reserves (20.97 billion barrels of oil and 5.977 trillion cu m of natural gas) which makes us ever more reliant on imports from overseas. Our annual fossil fuel imports (about 3.5 billion barrels of oil and 31 billion cubic meters of natural gas) puts hundreds of billions of dollars into the hands of governments and tyrants who may not necessarily have our best interests in mind. Our direct competition with other emerging economies like China and India for overseas oil sources drives up the price of oil. These emerging economies also are not encumbered by overburdening environmental regulations that allow their products to undercut ours in price. (Statistical source: CIA World Factbook and Energy Information Administration)

The Democrats' answer to the worst recession in decades is to introduce what amounts to a national energy tax that will lead to higher energy prices and further job losses. Cap and Trade would cause gas prices and home utility bills to rise and deal American families an even greater economic hardship. Congress should be making every effort to leverage our proven reserves of fossil fuels and to take advantage of the new technologies in nuclear power generation. Sadly, the opposite is true. Instead, the Democrats offer thousands of dollars in extra energy costs and the potential loss of millions of jobs for an energy policy that will do very little to convert our national energy consumption and clean up our environment.

Republicans in the House of Representatives have cobbled together some of the better ideas on energy and the environment into "The American Energy Act." (.pdf download) This proposal is an "all of the above" approach that reduces the energy dependence of the nation and keeps more jobs here at home, all while providing for a cleaner environment.

Regulatory hang-ups are addressed. The proposal reduces red-tape and cost caused by the Environmental Protection Agency arising from having to endlessly identifying impacts and alternative locations for energy projects. It ensure proper environmental review while and curtailing the lawsuits that are designed to slow down and obstruct American energy policy. While ensuring people a day in court, expedited judicial review is required and all court cases are filed in the District Court for the District of Columbia to prevent "forum shopping".

Oil and gas reserves are expanded. Revenue generated by the sale of new oil and gas leases are invested in renewable and alternative sources of energy and also provides for tax incentives for energy conservation. Development of America’s alternative fuels is encourage by repealing the current prohibitions on government purchasing fuels derived from sources such as oil shale, tar sands and coal-to liquid technology. Utilizing the vast coal reserves of the U.S. the plan also encourages the use of clean coal technology by allowing federal agencies to enter certain long-term contracts and loan agreements.

Oil refinery construction is increased by streamlining and accelerating the permitting process. The bill also instructs the President to convert at least three closed military installations for use as a refineries, including at least one suitable refinery of biomass to produce biofuel.

The Republican proposal establishes a goal to bring 100 new carbon-emission-free nuclear reactors online over the next 20 years. It does do by installing a new regulatory and permitting regime. This plan also address nuclear waste storage by reversing recent funding and regulatory decisions concerning Yucca Mountain located deep in the Nevada desert.

American ingenuity is tapped with a competition to advance R&D, pilot programs and commercial application of new and innovative energy technologies. a $500 million prize goes to the first U.S. automobile manufacturer to sell 50,000 economically feasible, fuel-efficient vehicles that get 100 mpg. Tax credits for the production of renewable electricity, like wind, solar, biodiesel and biomass are established, made permanent or expanded.

The bill provides tax incentives for businesses and homeowners who improve their energy efficiency. It also extends tax credits for using energy efficient appliances and energy efficient upgrades made to existing homes, a tax credit for individuals who purchase a new energy efficient home and a tax credit for energy efficient commercial buildings, home energy audits and smart meters.

This Republican energy and environment plan is bold, broad and forward looking. It is grounded in what can be done, not on a Rainbow and Unicorns approach favored by Obama and the Democrats. We don't want or need a national energy tax. We don't want or need the loss of jobs to countries who use lower priced energy. We want to reduce our dependence on dictators and tyrants who hold the oil leach. We want to harness our own resources, including the ingenuity of the American people. The House Republicans have given us a great starting point.

Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.

Out of the $2,973,322 in contributions Microsoft made, $2,124,186 went to the Democrats, while only $844,586 was given to the Republicans. This comes out to about 71.4 percent and 28.4 percent, respectively.

Kudos to Microsoft for its wise decisions, I'm sure this will go over with those employees that get furloughed.

Barack H. Obama speaks in Egypt where he gives up principles of the United States, its moral clarity and its best ally in the region, Israel - Obama gets a standing ovation. George W. Bush gives a speech in Baghdad, and liberates 50 million Muslims during his tenure in office - Bush gets a shoe.

While in China, Pelosi addressed her Chinese hosts. "Indeed, protecting the environment is a human rights issue," she said. "We hope to send a clear message that transparency, accountability, enforcement and respect for the rule of law are essential if we are to protect our planet."

Pelosi's trip came just days after the House Energy and Commerce Committee approved a bill that would establish a mandatory program for reducing greenhouse gas emissions. The bill requires factories, refineries and power plants to reduce emissions of carbon dioxide and six other greenhouse gases by roughly 80 percent by mid-century. Concurrently, the Obama administration ordered regulation of such emissions by cars and trucks. Pelosi promised the Chinese that U.S. climate legislation will pass this year the Congress this year. To accomplish these goals, Pelosi said, "Every aspect of our lives must be subject to inventory" in the fight against man-made global warming.